## Facts

- A condominium association representing unit owners sued over extensive defects in newly constructed condominium units, including severe water intrusion and structural problems alleged to violate the state building code.
- Unit owners repeatedly complained to municipal officials and sought assistance; city inspectors visited the property and learned of specific conditions suggesting code violations affecting particular units.
- Despite these reported and observed conditions, a city building inspector issued certificates of occupancy for units later found by a state building official to contain multiple building-code violations; corrective measures were ordered.
- The association alleged the city negligently inspected and approved noncompliant construction, contributing to the owners’ losses.
- The case first went through court-annexed arbitration, resulting in an award for the association; the city rejected the award, leading to a jury trial.
- At trial, the jury returned a verdict against the city for damages; over objection, the court allowed the arbitrator to testify about statements and events from the arbitration proceeding.

## Issues

1. Whether the public-duty doctrine immunized the city from tort liability for alleged negligent building inspections, or whether the evidence supported a “special duty” owed to these plaintiffs.
2. Whether it was error to admit the court-appointed arbitrator’s testimony about arbitration statements and events at the subsequent jury trial under Rule 5(f) governing court-annexed arbitration.

## Decision

- The court held the evidence permitted a finding that the city owed a special duty to the unit owners, so the public-duty doctrine did not require judgment for the city as a matter of law.
- The court held Rule 5(f) barred admitting the arbitrator’s testimony about arbitration proceedings at the later trial on the merits.
- Because the arbitrator’s testimony was prejudicial on contested issues (including the city’s knowledge), the judgment was vacated.
- The case was remanded for a new trial.

## Legal Principles

- A municipality is generally immune from tort liability for discretionary governmental functions under the public-duty doctrine, including building code inspection and enforcement, absent an exception.
- A “special duty” may arise when officials have specific knowledge of a particular plaintiff’s situation (or a distinct class) and undertake actions that move the plaintiff from the general public into a more particularized relationship relevant to the alleged harm.
- In court-annexed arbitration, Rule 5(f) prohibits admitting at a later trial evidence of statements made during arbitration and bars arbitrator testimony about the arbitration proceeding on the merits.
- Violations of the arbitration-evidence prohibition require a new trial when the improperly admitted material could have affected the jury’s determination of liability or credibility.

## Conclusion

The court concluded the plaintiffs presented sufficient evidence to avoid public-duty immunity through the special-duty exception, but it ordered a new trial because admitting the arbitrator’s testimony about arbitration proceedings violated Rule 5(f) and prejudiced the verdict.


Quality Court Condo. Ass’n v. Quality Hill Dev. Corp., 641 A.2d 746 (R.I. 1994)